Northern Rock Crisis
More questions than answers as new boss settles in
The troubleshooter sent to lead a
turnaround in fortunes at crisis-hit Northern
Rock hit the ground running yesterday in
his first day at the North-East bank, which
is soon to be nationalised. Business Editor
Julia Breen reports
HE did not arrive at the Northern Rock headquarters under a parachute, but he should have done.
Early yesterday morning, as a hard frost gripped the North-East, a plane landed at Newcastle Airport carrying the man everyone thought might have the answers.
Troubleshooter Ron Sandler, the new executive chairman of Northern Rock, who gained credit for bringing the insurance market back from the brink of collapse in the Nineties, is the man the Government is pinning all its hopes on.
Yesterday, he cheerfully strode into the press conference at Northern Rock House, in Newcastle, flanked by his new chief financial officer, Canadian Ann Godbehere, who was recently named one of the business world's 50 most powerful women.
Cheered up, no doubt, by their premier league salaries, the pair were bright and optimistic, and Mr Sandler said he was very excited about his new job.
The bustling Northern Rock headquarters is home to 3,500 staff and the interior is designed to look like streets rather than wide corridors.
At lunchtime, hundreds of workers have their lunch at pavement-style cafes.
Yesterday, they watched, slightly suspiciously, as hoards of hungry journalists, photographers and cameramen trooped past them on their way to the boardroom to hear what Mr Sandler had to say.
No doubt the staff will get their chance soon -Mr Sandler yesterday said he was trying to personally reassure as many of the bank's 6,000-plus staff as possible in group meetings.
What, exactly, he will reassure them about is anyone's guess. Yesterday, it seemed he was still untying his parachute strings.
He would not rule out or rule in any job losses, and declined to be drawn on any questions about the future of the workforce.
When some analysts are predicting swingeing cuts of 2,000 to 3,000 jobs, his non-committal answers will do little to placate the staff and their families.
He seemed unaware of the fact Northern Rock had planned to create 2,500 jobs at Rainton Bridge, near Sunderland, two years ago, and said he did not know what would happen there.
He also looked blank when he was asked what would happen about Northern Rock's sponsorship of sporting teams.
And when asked how long the bank would take to pay back Government loans, he said it would take "some time", the detail of which would happen would be decided in "due course".
What he would say, though, was that it was "business as usual".
He said: "Your money is safe if you are a depositor, and we are open for business if you are a prospective borrower."
He said he had no reason to believe Northern Rock's headquarters would move from the North-East, and that once he had carried out his brief, his job would change to a non-executive role, when he may benefit from some performance-related pay.
He also said he had no plans to rename the business, but said that the Northern Rock brand had been damaged and would have to be rebuilt.
Mr Sandler had only been in the job for half a day, so expecting him to have a watertight business plan was a little optimistic.
But for thousands of anxious staff and their families in the North-East, their questions remain unanswered until his feet are a little bit further under his new desk.
6:02am Tuesday 19th February 2008
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